Bounce in oil prices lifts energy shares, U.S. stocks
By Lewis Krauskopf
NEW YORK (Reuters) - The energy sector led the beaten-up U.S. stock market higher on Thursday as oil prices rebounded from 12-year lows.
Major U.S. indexes climbed about 2 percent after dropping to 3-1/2 month lows on Wednesday. Gains in stocks and oil also helped push the U.S. dollar higher, while the increases in risk assets reduced demand for safe-haven gold and U.S. government debt.
Equity markets have tumbled to start the year as volatility in Chinese shares and the persistent slide in oil made investors jittery about the health of the global economy.
"Oil has been able to hold the gains, and I think that has just given a little confidence for people to come back into the market today," said Maury Fertig, chief investment officer at Relative Value Partners in Northbrook, Illinois.
The Dow Jones industrial average .DJI rose 227.64 points, or 1.41 percent, to 16,379.05, the S&P 500 .SPX gained 31.56 points, or 1.67 percent, to 1,921.84 and the Nasdaq Composite .IXIC added 88.94 points, or 1.97 percent, to 4,615.00.
The U.S. energy group .SPNY surged 4.5 percent, leading all sectors.
Investors were also encouraged by comments from St. Louis Federal Reserve President James Bullard, who said the oil rout has caused a "worrisome" drop in U.S. inflation expectations that may make further rate hikes hard to justify.
The Fed will raise interest rates three times this year, a Reuters poll of economists found. Continued...